Legislative Analysis
Phone: (517) 373-8080
PROHIBIT PRICE GOUGING DURING STATE OF
http://www.house.mi.gov/hfa
EMERGENCY OR MARKET DISRUPTION
Analysis available at
House Bills 5895 (H-2) and 5896 (H-2) as reported from committee http://www.legislature.mi.gov
Sponsor: Rep. Jason Hoskins
House Bill 5897 (H-3) as reported from committee
Sponsor: Rep. Laurie Pohutsky
Committee: Economic Development and Small Business
Complete to 12-13-24
SUMMARY:
Together, House Bills 5895, 5896, and 5897 would create three new acts that would prohibit
charging excessively increased prices (generally an increase of greater than 15%) for
emergency supplies, other commodities, and hotels during a state of emergency, or for energy
products and services during a market disruption.
State of emergency would mean a natural or man-made disaster or emergency resulting
from a tornado, earthquake, flood, fire, riot, storm, act of war, threat of war, military
action, or period of instability following a terrorist attack, or a threat to the public
health, for which the governor declares a state of emergency.
Market disruption would mean a change in the market, whether actual or imminently
threatened, resulting from weather or other force of nature; failure, shortage or
disruption of energy production or distribution; strike; civil disorder; military action;
act of war; threat of war; national or local emergency; or other abnormal market
condition.
The bills are tie-barred together and are generally identical, with differences in the covered
goods, services, and circumstances as described below.
REGULATED GOODS AND SERVICES
House Bill 5895 would create the Commodities and Emergency Services and Supplies Pricing
Protection Act, which would generally prohibit a person from charging excessive prices for
goods and services during or reasonably after the declaration of a state of emergency.
The act would apply to any person conducting business in any chain of distribution for building
materials, consumer food items, goods, services, emergency supplies, or medical supplies.
Building materials would mean lumber, tools, windows, or other materials used in the
construction or reconstruction of a building, structure, or other real property.
Consumer food item would mean an item that is used or intended for use as a food,
drink, confection, or condiment by a person or animal.
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 Goods would mean any bought or leased tangible property, coupons, or certificates.
Services would mean any work, labor, or services, such as services furnished in
connection with the sale or repair of goods or real property or improvements to real
property.
Emergency supplies would include water, flashlights, radios, batteries, blankets, soaps,
diapers, temporary shelters, tape, toiletries, plywood, nails, and hammers.
Medical supplies would include prescription and nonprescription medications,
bandages, gauze, isopropyl alcohol, and antibacterial products.
During or reasonably after a declaration of a state of emergency, a person could not charge a
price for those materials, items, goods, services, or supplies that is grossly in excess of the price
at which similar materials, items, goods, services, or supplies are sold; charge an excessively
increased price for those materials, items, goods, services, or supplies; or otherwise offer those
materials, items, goods, services, or supplies at an excessively increased price in a county, city,
or township subject to the declared state of emergency.
With respect to HB 5895, excessively increased price would mean a price that
demonstrates an unjustified disparity between the price for building materials,
consumer food items, goods, services, emergency supplies, or medical supplies sold or
offered for sale in the market where those items or services are sold immediately before
a declaration of a state of emergency and the price of those items or services sold or
offered for sale in that market during or reasonably after a declaration of a state of
emergency.
An unjustified disparity would be a disparity of more than 15%, unless the person
selling or offering the items or services demonstrates that the price increase is
attributable to an increase in the cost of bringing those items or services to market, an
extraordinary discount in effect before the declaration of emergency, or a markup at or
less than the cost to the retailer.
The bill would allow the attorney general to reduce the length of the prohibition or any portion
of the affected area if conditions in the market where those items or services are sold return to
the conditions experienced immediately before the declaration of emergency.
House Bill 5896 would create the Hotel and Lodging Pricing Protection Act, which would
generally prohibit a person from charging an excessive price for lodging during a state of
emergency.
Lodging would mean a building or structure kept, used, maintained as, or held out to
the public to be an inn, hotel, or public lodging house (such as a full- or limited-service
hotel, resort, conference center, extended-stay hotel, vacation ownership, convention
hotel, bed and breakfast, or rented space in a mobile home park or campground).
During or reasonably after a declaration of emergency, a person engaged in the business of
offering, selling, or renting lodging could not charge a price that is grossly in excess of the
price at which similar lodging is advertised, offered, or sold; charge an excessively increased
House Fiscal Agency HBs 5895, 5896, and 5897 as reported Page 2 of 8
 price for lodging; or otherwise offer lodging at an excessively increased price in a county, city,
or township subject to the declared state of emergency.
With respect to HB 5896, excessively increased price would mean a price that
demonstrates an unjustified disparity between the price of lodging advertised or
offered for the market where the lodging is located immediately before a declaration
of a state of emergency and the price of lodging advertised or offered in that market
during or reasonably after a declaration of emergency.
An unjustified disparity would be a disparity of more than 15% unless the person
offering, selling, or renting the lodging can demonstrate that the price increase is
attributable to an increase in the cost of the goods or labor used in its business, an
extraordinary discount in effect before the declaration of emergency, or a regularly
scheduled adjustment in rates.
(The act would not prohibit an owner from evicting a tenant for a lawful reason.)
House Bill 5897 would create the Energy Pricing Protection Act, which would generally
prohibit a person from charging an excessive price for energy products or services during or
reasonably after a market disruption.
Energy products or services would mean gasoline, propane, or home heating oil (or a
service necessary to the provision of those products) that is vital and necessary for the
health, safety, and welfare of Michigan residents. The term would not include a product
or service regulated by the Michigan Public Service Commission, 1 the Federal Energy
Regulatory Commission, 2 a cooperative electric utility that is member-regulated under
the Electric Cooperative Member-Regulation Act, a joint-action agency utility system
owned by multiple municipalities, or a governing body of a municipally owned utility.
During or reasonably after a market disruption, a person conducting business in any chain of
distribution for energy products or services could not charge a price for those products or
services that is grossly in excess of the price at which similar products or services are sold,
charge an excessively increased price for energy products or services, or otherwise offer those
products or services at an excessively increased price.
With respect to HB 5897, excessively increased price would mean a price that
demonstrates an unjustified disparity between the price of an energy product or service
sold or offered for sale in the market where that product or service is sold immediately
before a market disruption and the price of the product or service sold or offered for
sale in that market during or reasonably after a market disruption.
An unjustified disparity would be a disparity of more than 15% unless the person
selling or offering the energy product or service demonstrates that the increase in price
1
The Michigan Public Service Commission generally has the power to regulate all public utilities in Michigan, except
municipally owned utilities and renewable resource power production facilities with a rated power production capacity
of up to 30 megawatts.
2
The Federal Energy Regulatory Commission regulates the interstate transmission of energy products and regulates
natural gas and hydropower.
House Fiscal Agency HBs 5895, 5896, and 5897 as reported Page 3 of 8
 is attributable to an increase in the cost of bringing the product or service to market or
an extraordinary discount in effect before the market disruption.
ENFORCEMENT AND REMEDIES
House Bills 5895, 5896, and 5897 contain substantively identical provisions, described below,
regarding enforcement of the acts and the remedies (investigations, class action lawsuits, and
fines and other penalties) that would be available after a violation.
Investigations
If the attorney general or a local prosecuting attorney has reasonable cause to believe that an
individual has information or is in possession, custody, or control of a document or tangible
object that is relevant to an investigation for a violation of any of the acts, they could serve a
written demand upon the individual to compel them to appear and be examined under oath and
to produce the document or object for inspection and copying. The demand would have to
comply with all of the following:
• Be properly served upon the individual in accordance with Michigan law.
• Describe the nature of the conduct constituting the alleged violation and sufficiently
describe the document or object so that it can be fairly identified.
• If applicable, contain a copy of the written interrogatories. 3
• Prescribe a reasonable time at which the individual must appear to testify and before
which the individual must have answered the interrogatories and produced the
document or object.
• Advise the individual that they must file objections to or reasons for not complying
with the demand with the attorney general or prosecuting attorney on or before
appearing to testify.
• Specify a place for the taking of testimony or for production of the document or object
and designate the custodian of the document or object.
If the individual does not comply, the attorney general or prosecuting attorney could file an
action to enforce the demand in the circuit court of the county in which the individual resides
or maintains a principal place of business, or in the circuit court for Ingham County. Notice of
hearing, a copy of the pleadings, and other relevant papers would have to be served on the
individual, and the individual could appear in opposition. If the court finds that the demand to
appear or produce the materials is proper, it would have to order the individual to comply,
subject to any applicable modifications. Upon the individual’s request and for good cause
shown, the court could also make any further order as justice requires to protect the individual
from unreasonable burden or expense. (This information would have to be included in the
demand described above, along with the relevant MCL citation.)
Under House Bills 5896 and 5897, testimony and material produced during the investigation
would be kept confidential, unless an enforcement action is brought against a person for a
violation of the act. (The fact that an investigative demand has been issued, however, would
not be confidential). Once the action has been filed, the investigative material could only be
disclosed in the course of discovery (in accordance with a protective order, as applicable), and
in support of or in opposition to the claims and defenses raised in the action.
3
https://www.law.cornell.edu/wex/interrogatory
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 Under House Bill 5895, the attorney general or a local prosecutor, as applicable, would have
to keep any procedure, testimony taken, or material produced confidential before bringing an
action for the violation under investigation.
Remedies
An individual who charges a grossly excessive or excessively increased price for the goods or
services covered by the acts or who otherwise offers those goods or services at an excessively
increased price during or reasonably after either a state of emergency (HBs 5895 and 5896) or
a market disruption (HB 5897) with an intent to accomplish a prohibited result would be guilty
of a misdemeanor punishable by up to one year’s imprisonment, a fine of up to $10,000, or
both. A person other than an individual would be guilty of a misdemeanor and subject to a fine
of up to $1.0 million.
For each violation, the attorney general could bring an action for appropriate injunctive relief
or other equitable relief and civil penalties in the name of the people of Michigan. The state, a
political subdivision, or a public agency directly or indirectly injured by a violation also could
bring an action for injunctive or other equitable relief, in addition to actual damages sustained,
interest on those damages from the date of the complaint (as determined by the court), and
taxable costs. For a flagrant violation, a trier of fact (the judge or jury responsible for evaluating
the evidence and making findings of fact) could increase the amount of damages recovered to
up to three times the actual damages sustained.
Additionally, the attorney general could bring a class action on behalf of persons residing or
injured in Michigan to recover the greater of the amount of actual damages caused by the
prohibited conduct or $100. (The attorney general would have to bring an action within six
years after the occurrence of the violation or one year after the last payment in a transaction
involving the prohibited conduct, whichever period ends on a later date.) Upon a motion of the
attorney general and without bond, a court could make an order to reimburse persons who have
suffered damages, carry out a transaction in accordance with the aggrieved persons’ reasonable
expectations, strike or limit the application of unconscionable clauses of contracts to avoid an
unconscionable result, or grant other appropriate relief.
The attorney general could petition for the defendant to bear the cost of any notices required
to be sent to the class at any stage of the proceedings, and in determining whether to impose
those costs on the defendant, the court would have to consider the probability that the attorney
general will succeed on the merits of the action.
If the court determines after a hearing that the defendant threatens or is about to remove,
conceal, or dispose of its assets to the detriment of the members of the class, it could appoint a
receiver or order the sequestration of the defendant’s assets.
The amount of allowable recovery would be limited to actual damages if the defendant shows,
by the preponderance of evidence, that a violation of the act resulted from a bona fide error
despite the maintenance of procedures reasonably adopted to avoid the error.
These remedies would be cumulative.
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 Additional provisions
The acts would not exempt, limit, or impair the attorney general’s ability to investigate,
determine, or impose liability under the Michigan Consumer Protection Act (see Background,
below) or other state laws.
If the attorney general asserts to a court that, in their judgment, testimony or other information
provided by a witness in a proceeding under or related to any of the acts may be necessary to
the public interest and the witness has refused or is likely to